California Financial Advisor Accused of Running a Ponzi Scheme
A California financial advisor has been accused of stealing nearly a quarter-billion
dollars in a real estate
Ponzi scheme. A federal grand jury has handed down a 23-count indictment to 60-year-old
Bruce Fred Friedman for allegedly defrauding investors out of approximately
According to the indictment filed in the U.S. Court for the Central District of California, Mr. Friedman operated the Ponzi scheme between 2004 and March 2009 through his Sherman Oaks-based Diversified Lending Group (DLG), which he is listed as the owner and operator.
Investors were supposedly told that their money was being used for the rehabilitation of “scratch and dent” properties and that DLG owned numerous properties that offered a study stream of rental income. Investors were allegedly guaranteed an annual rate of return of 9 to 12 percent.
However, it appears that Mr. Friedman may have used the majority of the money to benefit his personal lifestyle, as well as to enrich family members by investing in companies affiliated with them.
Court documents reveal that Mr. Friedman never disclosed to investors that he had previously served two years in prison for grand theft in 1981 and that he had filed for Chapter 7 bankruptcy in 1993.
Mr. Friedman has been charged with 15 counts of mail fraud, seven counts of money laundering and one count of wire fraud. He faces a potential 390-year prison sentence.
Mr. Friedman was arrested on September 13, 2010, in Cannes, France, and is currently awaiting extradition to the United States.